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DIVESTITURES
 6 Months Ended
Jul. 02, 2022
Discontinued Operations and Disposal Groups [Abstract]  
DIVESTITURES DIVESTITURES
Oil & Gas business

In June 2022, the Company announced that it had reached a definitive agreement for the sale of its Oil & Gas business as part of the Company's strategic commitment to simplify and streamline its portfolio to focus on the core Tools & Outdoor and Industrial businesses. Based on management's commitment to sell this business, the assets and liabilities related to Oil & Gas were classified as held for sale on the Company's Condensed Consolidated Balance Sheet as of July 2, 2022. There were no assets or liabilities held for sale relating to the Oil & Gas business as of January 1, 2022. This pending divestiture does not qualify for discontinued operations and therefore, its results are included in the Company's continuing operations within the Industrial segment for all periods presented.

Following is the pre-tax losses for this business for the three and six months ended July 2, 2022 and July 3, 2021:

Second QuarterYear-to-Date
(Millions of Dollars)2022202120222021
Pre-tax losses$(0.9)$(9.0)$(5.6)$(10.1)

In addition, the Company recognized a $168.4 million pre-tax asset impairment charge to adjust the carrying amount of the long-lived asset to its fair value less the costs to sell during the second quarter of 2022. The transaction is subject to regulatory approval and other customary closing conditions, and is expected to close in the second half of 2022.

Mechanical Access Solutions business
On July 5, 2022, the Company completed the previously announced sale of its Mechanical Access Solutions ("MAS") business comprising of the automatic doors business to Allegion plc for proceeds of $922.8 million. As of July 2, 2022 and January 1, 2022, the assets and liabilities related to MAS were classified as held for sale on the Company's Condensed Consolidated Balance Sheets. The estimated pre-tax gain on sale to be recognized during the third quarter of 2022 is approximately $600 million to $650 million.
As part of the purchase and sale agreement, the Company will perform transition services relating to certain administrative functions for Purchaser primarily for a period of two years or less, pending integration of these functions into their pre-existing business processes.

Commercial Electronic Security and Healthcare businesses

On July 22, 2022, the Company completed the previously announced sale of its Company's Convergent Security Solutions ("CSS") business comprising of the commercial electronic security and healthcare businesses to Securitas AB ("Purchaser") for proceeds of $3.2 billion. As of July 2, 2022 and January 1, 2022, the assets and liabilities related to CSS were classified as held for sale on the Company's Condensed Consolidated Balance Sheets. The estimated pre-tax gain on sale to be recognized during the third quarter of 2022 is approximately $400 million to $450 million.

As part of the purchase and sale agreement, the Company will perform transition services relating to certain administrative functions for Purchaser primarily for a period of one year or less, pending integration of these functions into their pre-existing
business processes. A portion of the $3.2 billion received at closing reimburses the Company for transition service costs expected to be incurred.
The MAS and CSS divestitures represent a single plan to exit the Security segment and are considered a strategic shift that will have a major effect on the Company’s operations and financial results. As such, the operating results of the MAS and CSS are reported as discontinued operations. Amounts previously reported have been reclassified to conform to this presentation to allow for meaningful comparison of continuing operations. These divestitures allow the Company to invest in other areas of the Company that fit into its long-term growth strategy.

Summarized operating results of discontinued operations are presented in the following table for the three and six months ended July 2, 2022 and July 3, 2021:

Second QuarterYear-to-Date
(Millions of Dollars)2022202120222021
Net Sales$489.8 $502.0 $978.1 $978.3 
Cost of sales325.9 320.3 638.5 620.1 
Selling, general, and administrative(1)
139.6 134.5 277.8 268.3 
Other, net and restructuring charges17.9 14.8 33.2 26.4 
Earnings from discontinued operations before income taxes$6.4 $32.4 $28.6 $63.5 
Income taxes on discontinued operations(2.6)6.4 (0.2)10.3 
Net earnings from discontinued operations$9.0 $26.0 $28.8 $53.2 
(1) Includes provision for credit losses.

The following table presents the significant non-cash items and capital expenditures for the discontinued operations with respect to MAS and CSS that are included in the Condensed Consolidated Statements of Cash Flows (in millions) for the three and six months ended July 2, 2022 and July 3, 2021:

Second QuarterYear-to-Date
(Millions of Dollars)2022202120222021
Depreciation and amortization$— $17.3 $0.4 $34.8 
Capital expenditures$2.3 $1.9 $6.3 $6.8 
Stock-based compensation$9.2 $1.9 $18.5 $3.9 

The carrying amounts of the assets and liabilities that were aggregated in assets held for sale and liabilities held for sale as of July 2, 2022 and January 1, 2022 are presented in the following table:

(Millions of Dollars)July 2, 2022January 1, 2022
Cash and cash equivalents$19.7 $145.1 
Accounts and notes receivable, net548.3 513.9 
Inventories, net209.4 169.4 
Other current assets73.6 41.2 
Property, plant and equipment, net198.2 84.3 
Goodwill and other intangibles, net2,231.6 2,270.2 
Other assets302.8 281.3 
Valuation allowance(168.4)— 
Total assets$3,415.2 $3,505.4 
Accounts payable and accrued expenses$483.5 $460.4 
Other long-term liabilities137.1 137.4 
Total liabilities$620.6 $597.8